Maintenance Commission

  • This is a charge to a landlord as a mark-up for handling maintenance work.
  • AKA kick-back commission
  • Where charged it is an OFT requirement that the agent advises the landlord.
  • It is wrong to secretly set up a deal with say a builder whereby the builder adds a mark-up in such a way that the landlord pays the full invoice and the builder refunds a portion back to the agent – hence kick-back
  • Leydon Letting agents have never made such a clandestine arrangement and never will!
  • This is not to say it is wrong to charge per se – merely that the landlord should be advised in advance as part of the terms and conditions regarding the terms of business between the landlord and the letting agent.
  • Examples of this might arise following storm damage .
  • An agent inundated with storm damage repairs becomes embroiled in work not part of what the management fee is expected to cover.
  • So it is reasonable to make a charge – usually a percentage of the total cost.
  • In the 1987 south East Storm many letting agents were tied up with significant work instructing tradespeople to position tarpaulin on roofs pending permanent repairs.
  • With tradespeople so scarce because most were overwhelmed by the scale of the repairs, it would involve many hours of searching to find an available trades-person.
  • Many would-be trades-people simply jumped on the band wagon claiming to be competent, but proved hapless.
  • To avoid claims of negligent, an agent is well advised to secure evidence of the trades-person’s insurance.
  • When we once asked for such information the insurance commencement date coincided with our request to see it!
  • In other words “the trades-person” quickly consulted an insurance broker to procure insurance in order to secure work.
  • This tells a prudent letting agent that the ‘insured’ is probably a novice having-a-go – avoid like the plague!

What are your thoughts?

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